Home Blockchain The Core of Dapps on Ethereum (ETH) are Based on Smart Contracts Which Codify Business Logic

The Core of Dapps on Ethereum (ETH) are Based on Smart Contracts Which Codify Business Logic

Ethereum Smart contract

Smart contracts are already making several applications in the world very practical and highly functional. They are everywhere on applications on the blockchain. Smart contracts are based on the blockchain – the underlying technology.

Blockchain being an immutable distributed ledger, it is hard to change something later. Literally, the details are there forever.  Being distributed, no one computer can decide what is happening on the blockchain, it is a network of computers from across the world documenting the transactions. Ledger is a lot like the Excel table.  Cryptology makes the DLT work like magic. And, all of these things together makes the blockchain effective.

It is a lot of math that makes this technology be what it is. In simple terms, blockchain is a history of all transactions.

A technology platform like Ethereum + blockchain, it is possible to build decentralized applications aka dApps.  At the core dApps are smart contracts. 

Olga Mack, TEDxSanFrancisco points to how smart contracts are a misguided name.  They are not really smart. And, they are not really contracts.  They are not like the pages and pages of legalities which are signed for execution. It is a different kind of contract.  In the sense that they are really pieces of code which codify business logic.

At the core, they facilitate 3 functions.  They store rules, they verify rules, and they self-execute rules. They are like very secure vending machines. For instance, every vending machine stores a rule as to what to dispense when a certain amount of money or dollar is inserted. It verifies the correct amount. And, after due verification you get a snack of your choice. This is how smart contract works.

Because, they are blockchain applications, there is no intermediary.  There is no broker.  There is no escrow agent.  There is no government, corporation, and not even a lawyer. It executes automatically.

So, to summarize, smart contracts are pieces of code, they are very secure and they self-execute. This is very exciting because the world of business is in the process of embracing smart contracts. There are numerous applications in IOT, financial sector, supply chain, and numerous others.

They have the potential to solve problems that have never been solved before. Also, smart contract can power just one application or it can combine more than one application. The scalability issue on Ethereum is because of the over load of the billions of business logic loading it.  The speed and functionality will be sustainable only when a breakthrough solution is arrived for scalability.

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dan saada

Dan hold a master of finance from the ISEG (France) , Dan is also a Fan of cryptocurrencies and mining. Send a tip to: 0x4C6D67705aF449f0C0102D4C7C693ad4A64926e9

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